Knowledge baseNextWhat is transaction monitoring?
What is enhanced due diligence?
The deeper checks for higher-risk customers: PEPs, high-risk countries and unusual relationships.
Customer due diligence is the standard set of checks. Enhanced due diligence, EDD, is what you add when the risk is higher: for politically exposed persons, for customers linked to high-risk countries such as those on the FATF lists, and for relationships that are unusually complex or large.
EDD typically means establishing where the customer’s wealth and the funds in the relationship come from, getting senior management to approve the relationship, and watching it more closely afterwards.
What a regulator looks for is that the extra steps were taken and recorded: who decided, on what evidence, and why.